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Home > Business > Personal Finance



4 facts your finance planner won't tell you

P V Subramanyam, Moneycontrol.com | June 15, 2007 13:32 IST

We bring you four more confessions of a financial planer.

I can't beat the market

Many people believe a financial planner can help them supercharge their investment returns. Many financial planners, however, believe they're doing well if their clients' portfolios simply match market averages.

Understand that good, comprehensive financial planning doesn't ensure outsized returns. A plan should improve your credit, minimize your taxes, protect your assets, take care of your heirs and grow your wealth over time.

I won't save you from yourself

The best financial planners don't let their clients overdose on any 'hot trend'. Your best bet is to a planner who don't have a consistent philosophy or who is constantly talking about the next hot trend. In addition, take some responsibility for your actions: Do not be a trend-chaser or insist on wild swings in course, especially if your trained, experienced planner advises otherwise.

I have a chequered past

Sooner or later, some financial planners will have a run-in with an unhappy client. If those disputes regularly escalate to lawsuits, however, or your advisor has been pulled up by a regulatory board, that's a red flag. Ask for three references of clients who have been with them for at least five years, and make sure they are not related.

I made three trips abroad -- and you paid for it!

When certain financial schemes or products create a conflict of interest where your planner stands to gain more in commissions, he or she will probably recommend a scheme, which will entitle him or her to a foreign trip, a plasma television, or a car.

Too bad if it hurts your bottom line.

The author is a financial domain trainer.

For more on financial planning, click here.






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